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More Fun With the TD e-Series Funds

Last month, I shared the story of Shannon, an investor in western Canada who tried to open an account with TD to buy their low-cost e-Series index funds. As their name suggests, the e-Series funds are intended for online clients, and investors like Shannon who try to access them through their local TD Canada Trust branch have had frustrating experiences. Many bank staff seem to have no idea what an e-Series fund is, and those who do dare not speak the name aloud.

Shannon recently contacted me with an entertaining update on her ongoing adventure:

“I thought I’d let you know how it went with TD in setting up the account so I could purchase the e-Series funds. We’ve been in the midst of untangling our mess with [our former advisor] and put the TD stuff on the back burner, but I went in today to open the account.

“I know I could have applied online, but I really wanted to see what the experience would be like. I’m at that age when my curiosity has overtaken my natural shyness and ego. In other words, I am no longer afraid to look like an idiot. And there were so many different experiences noted on your original post that I felt an obligation to follow this through. As a middle-aged woman, I get few opportunities to engage in espionage.

“I called ahead and said I wanted to open a TD Mutual Funds TFSA. When I got there, I was met by a rep who was new to mutual funds (of course), so her supervisor sat in on the meeting. It took us an hour and a half to open the account.

“The representative I talked to on the TD Investment Services hotline said that I should tell the branch staff that as I was unsure what I wanted to invest in, and that I just wanted a money market fund for now. He said not to mention the e-Series funds. (And he works for TD!) So I did that.

“The supervisor looked at me as if I was a virus about to topple their entire system. She said that wasn’t how it worked. I couldn’t just ask for a money market fund — we had to go through their Customer Investor Profile, and it would tell me what I should buy. I said, ‘OK, let’s answer the questions so the recommendation at the end is a money market fund.’ She became very red in the face and I thought I might have to administer CPR. The newbie wasn’t saying a word. The supervisor said that that was impossible, we had to work through the questions, blah, blah, blah.

“Finally, I couldn’t take it anymore. I broke down and said I only wanted to open the account so I could buy the e-Series funds. A hush fell over the entire bank.

“When the supervisor could speak again, she said she that if I was going to purchase those funds, I had to go through TD Waterhouse. I explained that the rep on their hotline had told me I didn’t have to open an account with TDW. Luckily I’d printed off his email and brought it with me. The supervisor didn’t believe me, but I think she could tell that I was going to walk if she insisted.

“We then spent 45 minutes going through the Investor Profile. During the whole time, the supervisor made side comments about those funds not doing as well as TD’s other mutual funds, and that they were not for the sophisticated investor, and that I would receive no help from a trained TD rep. I patiently answered the questions, trying to ignore her comments. The newbie, irritatingly, read every question and every response aloud, sometimes raising her voice to speak louder than the complaining supervisor. It was surreal, and I’m sure that after a few glasses of wine I’ll look back on it and see it as an episode of Fawlty Towers: ‘Basil Goes to the Bank.’

“Finally, the supervisor, certain that I was threatening TD’s corporate structure, decided I had to sign a Transaction and Account Maintenance Form saying. “Client wishes to invest solely in money market fund as she may look at purchasing e-Series funds.” I left with 18 pieces of paper, having to sign six different times. I’m sure the supervisor had to lay down somewhere after I left.

“The hotline rep also suggested I bring the three-page account conversion form to the branch, along with a void cheque. The newbie said she would see that it got into the mail, though I have no idea if it will actually end up where it should. There was so much paper on the desk that I won’t hold my breath.

“I understand that TD is also in the business of selling high-MER mutual funds, but why offer the e-Series funds if even the hotline staff encourages you to lie about your motives, and you’re treated by the branch staff as if you were challenging their entire way of business? I’m convinced of the value of index investing — I’ll never do regular mutual funds again — but may have to find a different way to do it.”

There’s no question that TD makes it harder than necessary to access their e-Series funds. But you don’t have to endure an ordeal like Shannon’s. Here’s what to do: [These instructions were updated in July 2013.]

You can access the e-Series funds (as well as all other mutual funds, ETFs and stocks) by opening a discount brokerage account with TD Direct Investing. This is generally the best solution, except for RRSPs under $25,000, which are subject to a $100 annual fee. (Note you can opt for a Basic RSP—which allows you to buy mutual funds but not ETFs or stocks—for just $25.)

If you’re opening an RRSP or non-registered account and you’re already a TD Canada Trust customer, complete this online application. Print the form and mail it in with your signature. No need to open a discount brokerage account.

If you’re already a TD Canada Trust customer and you’re opening any other type of account—a TFSA, an RESP, or a locked-in retirement account—you need to follow two steps. First apply for a TD Mutual Funds Account by visiting your local branch. You don’t need to purchase any mutual funds at this time. Once your account is opened, convert it to a TD e-Series Funds account using this form.

Finally, if you’re not currently a TD Canada Trust customer, you’ll need to visit a branch to open a regular TD Mutual Funds Account. You can set up your new account as an RRSP, non-registered, TFSA or RESP and then link it to a chequing account with another bank. Again, don’t make any mutual fund purchases yet. First fill out the form to convert to a TD e-Series Funds account.

82 Responses to More Fun With the TD e-Series Funds

Transfer the money you want to use for the RRSP into a RRSP savings account now or a 1 month RRSP GIC then when you get yourself set up simply make your purchase from that money. You will get your tax receipt now, beat the deadline and no stress.

I wasn’t sure what i wanted to do yet either so that’s what I did. In a few weeks when I feel I know what investment I want to add to, I’ll make that decision then and switch over.

Hi Dan
I am finally moving my children’s RESP accounts over to TD e-series funds. Some of your readers may be interested to know that in order to receive a QESI grant (a 10% grant from the govt of Quebec) you have to go through TD Waterhouse as the TD Mutual Funds are not eligible to receive this grant.
My question now is which US fund to go with? The TD e-series offers a US fund in Cdn dollars, a US dollar fund and a hedged fund. I’ve been reading all of your posts about US listed ETFs and definitely see the value to going with US listed ETFs. However, in this case the MER is the same for the US and Cdn dollar fund so from what I understand only the withholding taxes and the conversion fees should make a difference in the earnings between the two accounts. (I should note that my children will be going to university in Canada so will be spending Cdn dollars. )
In terms of the hedged US fund account, my oldest is 13 and will be going to university in 2017 (in 5.5 years) and both children will be spending the money between 2017 and 2022 so I don’t have a long time frame for this investment (10 years max). Therefore I am wondering whether I’d be safer to go with the hedged account?
Thanks,
Debbie

I am a TD Mutual Fund Rep at a local branch. I’m pretty new *only 6 months* but I can give a prespective on the TD side of things.

TD Mututal Fund Reps are not given any specific training on e-series funds whatsoever. That is completely left up to the supervisor/branch manager of each branch.

I do my research and consistently read as many financial blogs as possible in order to know what my customers are looking for and concerned about outside of the training I’m given by TD. However I don’t know of any other rep that does this. I’ve told them to do it but I don’t think they’ve bothered. Therefore I knew about the e-series funds the first week on the job and have even opened accounts and done conversions for customers.

We had a rep at my branch who got a very severe complant a few months before I came to the branch because of an e-series fund account opening. He didn’t know what they were and opened the wrong account and basically was the rep in the original post.

My recommendation when going to open an account is to tell them when you are booking the appointment exactly what you want. Do not hide that you want the e-series funds. On the phone to book the appointment ask for someone who understands e-series funds or for a Financial Advisor not a Financial Service Representative. FAs are more experienced then FSRs. I’m an FSR but I’m not the norm.

The last account I opened and converted to e-series took 20 minutes because the guy let me know exactly what he wanted up front. We have to do the questionaire because of regulations but if I know you’re going to convert to e-series I will go throught it as quickly as possible.

TD mutual fund reps in the branch do not get any commission. However we do have sales goals and customer service goals each quarter and receive bonuses if we meet these goals. A rep opening up an e-series account will not recieve anything that helps him/her meet their quarterly goals. Thats why they may not be happy about opening them. However a bad customer experience rating will severly detract from their bonus and leave a black mark on their record. Just something to keep in mind.

@Renee: Many thanks for the “insider information.” I think this will be very helpful for readers who are looking to get access to these funds. Keep up the great work—it’s good to know that there are some reps looking out for the customer.

Hi, I find myself in a similar situation Paul N recommended a solution for above. Just to clarify, he is proposing to open up a RRSP savings account when meeting at TD rep. It would then be possible to convert this to an e-series even though it isn’t a mutual fund? Thanks.

Yes you got it. You may have heard some radio ads to “park” your money? So you simply make a cash contribution to your RRSP, so you get your receipt in the mail a few weeks later. Then you have to go through the process of setting up your e-series account. That can be a bit of a challenge depending on who you sit with on any given day to do this at your branch. (read above comment’s). When you are given the green light TD can transfer your parked cash (don’t lock it in a GIC) “in kind” to the e-series funds of your choice.

I have to transfer a “locked-in” vested pension from a previous employer within about 30 days, along with a lump sum representing the commutated value that exceeds the maximum pension value. Otherwise I have to settle for a monthly pension.

I’ve queried several other financial institutions about this situation over the past few weeks, but have found their “advisors” either trying to push me into plans with high MERs and ridiculous deferred fees, or otherwise seem to know very little.

TD e-series Funds strike me as a more satisfying solution. But is this doable; can I actually get these locked-in funds transferred into a low-cost Locked-in Retirement Savings vehicle using TD e-series Funds?

Does TD investment services have an e-Series account for locked in RSPs?
The problem with TD Waterhouse is they charge $25 annually if I don’t have $25000 in the RSP account. I’ll be well short of that and I can’t add any more money into the LIRA.

@Joe: If you go through TD Direct Investing it looks like you’re stuck with that $25 annual fee. But check to see if you can open a TD Mutual Funds account instead. It’s a little more difficult, but it should allow you to access the e-Series funds without an annul fee. I’d just give them a call to ask.

I just called TD Mutual funds. They told me I can open a locked-in RRSP e-Series account.
The procedure is the same as opening a regular e-Series account. Just make sure you open a locked-in MF account before sending in the conversion forms.

At your sagacious suggestion, I’ve got in touch with a very helpful BDA (Neil Drake- wonder if he’s related to the financial writer Tom Drake?) at TD Direct Investing (nee TD Waterhouse) here in Winnipeg, who skillfully threaded through all the paperwork required to get the cash transferred and to set me up in a LIRA.

When the funds transfer, relieved and nervous I will finally begin my Couch Potato investment odyssey!

I’m glad I was able to help Brian. While I’m not related to Tom Drake (that I know of), I am a fan of his work.
I never realized the difficutly that some are having opening TD e-series accounts. If anyone else is having these types of issues, please feel free to contact me (neil.drake@td.com) and I’ll see that you’re taken care of.

First of off, thank you so much for having a such a great and informative website! My entire investing portfolio revolves around the couch potato method.

So I already have TD e-series funds with my TFSA but I would like to move money from another bank to these funds. The other bank is simply a High Interest TFSA. So far, what I’ve done is set-up a High Interest TFSA with TD in preparation for the move but I think that I didn’t need to do that. Aren’t I only able to move existing TD Mutual Funds over to TD e-series funds or would I somehow be able to roll-over money from my TD High Interest Savings Account to TD e-series funds?

My part II question is that I will be charged $50 if I decide to close my account with the other bank and move the funds over. Do you think there’s any chance that TD would absorb that $50 fee for me? I would get them to just put that money into a regular account so then it doesn’t affect my contribution room.

@Dan: Thanks for the comment and glad you’ve found the blog helpful. These are really questions for TD: they are the only ones who can give you definitive answers. But my understanding is you can only convert a TD Mutual Funds account to an e-Series account. If you set up tour TFSA as a high-interest savings account, you may have to go through an extra step.

It’s not likely TD will reimburse your transfer-out fee. Some brokerages do this for large accounts, but not for a small TFSA. Never hurts to ask, though.

Hi I am a TD bank customer. I have TD comfort portfolio for both RRSP and TFSA. I would like to convert them into TD eseries. Reading through the above comments on this page, I understand that I can do this by mailing a conversion form (physical copy). Can I do it online? I have a question regarding redeeming/ cashing out the above funds from TFSA? Can I do it online? Also I heard some comments about parking cash, money markets etc. I am fairly new to investing in Canada and would like to understand whether I need to open money market fund, and for cash etc.

Another question related to the above. There is a 30 day lock in for the current comfort portfolio for both TFSA and RRSP that I hold with TD bank. Should I wait till the 30 days are over to send the conversion form? Thanks

So, to confirm: My best choice as someone that doesn’t bank at TD and has less than $25000 fpr RRSPs, would be to open a TD Discount Brokerage for RESP, Basic RSP, and TFSA for my wife and I and the benefit would be that I can avoid visiting a TD Branch?

Thanks Dan. I Tweeted you as I found a link to a TD Waterhouse online application, but it was a dead end.

Looks like I’ll have to go back to the MF Advisory who is hell bent on me signing up for TDB888 with an MER of 2.13 that underperforms a Balanced Index portfolio. At least this time I’ll go armed with the info from this article.

@Paul O: You should not have to put up with that kind of nonsense. You can call any TD branch and just tell them you want to open TD Direct Investing accounts. Make it clear you don’t want an advisor: you just want the discount brokerage. Unlike with TD Mutual Fund accounts, TD Direct will not go through the process of determining your risk profile and recommending investments, so they should have little opportunity to try to upsell you. If an advisor ever makes you feel uncomfortable, get up and leave.http://www.moneysense.ca/invest/when-your-adviser-hates-index-funds

Just to add some of my experience: I live overseas but hold TD mutual funds in registered and non-registered accounts at TD bank. I called TD Direct Investing to ask if the form (APPLICATION TO CONVERT TO A TD e-SERIES FUNDS ACCOUNT) would suffice to convert my TD mutual funds into TD e-series. I was told no, it was not, and would require substantial paperwork necessitating a visit to my local branch.

@Christie: It’s hard to be definitive without knowing your situation, but in general the TD Direct route is much more flexible. As you TFSA grows larger you can add ETFs, GICs or other investments all in the same account. That route is usually preferable to the more restrictive TD Mutual Funds option.

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